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Recent Changes to ABLE Accounts: What You Need to Know
Important updates to disability savings options are expanding opportunities for individuals and families across Michigan. Achieving a Better Life Experience (ABLE) accounts — including Michigan’s MIABLE Disability Savings Program — have long allowed individuals with disabilities to save for future needs without jeopardizing eligibility for critical public benefits. Recent changes make these accounts even more accessible and valuable as a planning tool.
What Are ABLE Accounts?
ABLE accounts allow eligible individuals to save and invest funds for qualified disability expenses such as housing, transportation, education, healthcare, assistive technology, and employment support. Earnings grow tax-deferred, and withdrawals for qualified expenses are tax-free. Michigan residents also benefit from a state income tax deduction of up to $5,000 for single filers or $10,000 for joint filers on contributions made to MIABLE accounts.
Contribution and balance limits are important considerations. Each year, up to the federal annual gift tax exclusion amount (currently $18,000 per beneficiary, subject to periodic adjustment) may be contributed to an ABLE account. Individuals who are employed and do not participate in an employer-sponsored retirement plan may be eligible to contribute additional funds through the ABLE-to-Work provision.
Accounts may grow significantly over time, with Michigan’s program allowing balances comparable to the state’s college savings limits — currently permitting accounts to reach well into the hundreds of thousands of dollars. However, Supplemental Security Income (SSI) benefits may be suspended if an account balance exceeds $100,000, making careful monitoring and planning important.
Expanded Eligibility Beginning in 2026
One of the most significant upcoming changes concerns eligibility. Previously, an individual’s disability must have begun before age 26 to qualify. Starting January 1, 2026, eligibility expands to individuals whose disability began before age 46.
This change will allow many more Michiganders — including veterans and individuals whose disabilities occurred later in adulthood — to take advantage of ABLE accounts while still preserving access to essential benefits such as Medicaid and SSI.
Easier Access and Account Management
Recent updates have also made ABLE accounts easier to open and manage. Expanded rules now allow a broader range of authorized individuals to assist beneficiaries with establishing and administering accounts, simplifying enrollment for families and caregivers.
Modern online tools further enhance convenience, allowing account holders to automate contributions, monitor investments, and even utilize checking and debit features to pay qualified expenses more easily.
What This Means for Clients
For individuals with disabilities and their families, these improvements make ABLE accounts a more flexible and accessible savings option. Whether planning for housing, transportation, education, or long-term care support, MIABLE accounts can play an important role in preserving benefits while promoting financial independence.
We encourage clients and professional partners alike to revisit ABLE accounts as part of comprehensive planning strategies. And as we celebrate Abraham Lincoln’s birthday, it’s fitting to note the fun wordplay — “Abe” + “le” = ABLE — a reminder that these accounts are all about empowering individuals and families to plan confidently for the future.
Need Help?
If you or someone you serve would like guidance on how ABLE account changes fit into your planning goals — including eligibility questions or coordination with trusts and public benefits planning — please contact Estate Planning and Elder Law Services, P.C. Our team is ready to help you navigate these updates with confidence.
